Nova Scotia Power faces questions over coal pier deal

Nova Scotia Power has gotten approval for a $6.5-million buyback of the international coal pier in Sydney but could be penalized over delays getting regulatory approval.

The Utility and Review Board endorsed the acquisition, made last year, in a ruling Thursday. But the regulator said the power company was wrong to put the capital project in its rate base, and earn a return on it last year, before getting the green light.

“The handling of this major project, before submission for approval, undermines the board’s confidence in (Nova Scotia Power’s) ability to manage capital planning,” board member Murray Doehler said in a letter to the company.

The regulator asked Nova Scotia Power why it shouldn’t be sanctioned for earning the unauthorized return. The letter doesn’t put a dollar figure on the possible sanction.

A company spokeswoman wouldn’t comment Friday on the possibility of a penalty or say what the amount could be.

“The board’s decision confirms the purchase was in the best interest of customers and they have provided additional feedback,” Neera Ritcey said. “We are reviewing the decision currently.”

Doehler said he’s satisfied the coal pier is the best option for supplying fuel to the Point Aconi and Lingan power stations. The facility is “a strategic asset,” even as the province scales back coal-fired generation, the letter said.

Nova Scotia Power purchased the coal pier from Logistec Canada Inc., which had owned and operated the facility for more than a decade under an arrangement with the utility.

The power company, a subsidiary of Emera Inc., briefly owned the coal pier in 2002.

In its letter, the regulator also questioned why the company didn’t include the project in its capital plan in 2012-13 or 2013-14. The acquisition was filed in October as an unforeseen project instead.

“The option to purchase the international coal pier in 2012 has been known for 10 years,” Doehler wrote.